Emilio's 1st term in office.....



Took over power when NSE20 was at 1357. It closed 2007 at 5445.

I don't think NSE20 will tank as far as 1000 points but that would be a sight to behold. The sort of ridiculous prices that would print...penny stock flood gates.

One can argue that Emilio benefited from the US housing bubble that played out in the early 2000s.The Greenspan Fed had lowered Fed funds rate to 1% expanding the dollar money supply that found itself into real estate and US stocks.It was "happy bubble" times in the West and considering Westerners constitute the majority of the investors in our bourse,they also came to scoop up our local shares in the feel good happy times.Global stock and real estate markets rose in tandem as the West easy money policies were fueling global rise in asset prices then in 2006 cracks started appearing in the US housing bubble and Western investors started pulling back from frontier markets like Kenya thus our indices stalled.Then as we all know 2008 happened and with the GFC global stock and real estate markets imploded and Westerners were forced to liquidate our stocks in droves to meet margin calls in their tumbling markets thus our NSE20 fell 50% just like the S&P 500.

Then Western central banks went nuts with lowering rates to zero and engaging in massive QE money printing of several trillions of dollars re-inflating their stocks and thus their investors came back to Kenya and NSE20 rose in tandem.

The period 2011-2012 saw the European sovereign debt crisis and the Westerners pulled back from our markets again thus our indices fell.Massive QE stimulus by Western central banks "saved" the European debt fiaso and the Caucasians came back to our market hence our equities rose.

From 2015,the Fed signaled intention to raise rates and this strengthened the USD considerably and instilled confidence in the US thus global capital was once again attracted to the US dollar and US asset classes making the wazungus pull back from our bourse thus the decline during that period

Late 2016 saw the Trump victory that promised tax cuts,reduced regulation and massive QE stimulus from the European and Japanese central banks and 2017 ushered a year of massive near parabolic gains in global markets which also pushed up our stock market.The peak in global market came in January 2018 but markets started to unravel in late January of 2018 as all the Western central banks money printing resulted in inflation fears creating a steep sell off in global markets.Its at this point that the US markets diverged with global markets that never recovered from their January 2018 highs which includes the NSE20.US markets continued to surge higher to all time highs while other global indices lagged as Fed rate hikes were sucking ever more global capital and Westerners felt it better to invest in the US and pulled back from our equity market


Also now foreign investors are pulling out of our market to meet margin calls in their faltering markets due to coronavirus fears.

Thus the Kenyan bourse is simply a reflection of global macro-economic and market trends and what happens in the developed world has a direct co-relation with the performance of our stock market.

They should bring some of that cash to Kenya! Just $10bn can make a huge difference!

Dow shed 1190 points by close of session! European markets also ended up heavily in the red. Will be very interesting to see whether the NSE20 holds on to the GFC low in light of the brutal sell-off. If the markets are pricing in a global recession for 2020 this will be very painful and steep downtrend.

Yes,the Dow records its greatest one day point drop in history.Interesting price action today.S&P had its 200 SMA at 3050 and when the index hit this critical technical level,the Plunge Protection Team (PPT) pulled all the stops with new Fed repo liquidity and tried to buy back the market which almost went positive but it was a bull trap as the markets seriously flashed out and algos just went nuts and sold in huge volumes in the last 3 hours of trading.Bond yields hit a historical low yesterday.

Now the Fed is under IMMENSE PRESSURE to cut rates and pump even more liquidity.Trump bullying the Fed to pump even more money but unlike prior market corrections caused by financial distress that was "resolved" by more money printing,the coronavirus is a black swan that cannot be mitigated by money printing.The only hope for this bubble market is that a vaccine or antivirus drug is found or as scientists hope the summer months in the Northern Hemisphere may subdue the virus.

For those of us shorting this market its serious $$$$$$ everyday

Both have tanked under Tano Tena!